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Weekly Market Commentary

The Markets

Investors are taking it all in stride.

As Israel and Iran exchanged missile strikes last week, stock markets in the United States remained relatively steady, reported Michael Msika and Phil Serafino of Bloomberg.¹

“On June 13th, as the bombs began to fly, S&P 500 futures fell by 1.6 [percent]. But as the hours passed, the stock market steadily climbed. The index has now recovered to around 6,000, a hair’s breadth from an all-time high…consider the long list of recent events that at first seemed to have epoch-making potential, only to fizzle out,” reported The Economist.²

This is often the case with geopolitical events.

Any time conflict flares, it can be difficult to comprehend the potentially world-changing outcomes, much less factor them into stock prices. As a result, many investors ignore geopolitical upheaval.

The Economist emphasized this point when it reported that the Israel-Iran conflict joined a “long list of recent events that at first seemed to have epoch-making potential, only to fizzle out…Examples include China’s anti-lockdown protests, the Wagner Group’s rebellion in Russia and skirmishes between India and Pakistan”. ²

So, what has investors’ attention?

One answer is economic growth and the performance of publicly traded companies. “The momentum of markets can be relentless. Shares tend to grind higher over time as consumers spend, entrepreneurs innovate and companies grow. Earnings per share for American firms have risen by 250 [percent] or so over the past 15 years. For any event to have a meaningful impact, at least for longer than a few days, it must harm such dynamism.”²

Last week, Federal Reserve Chair Jerome Powell confirmed the U.S. economy remains strong. During a press conference, he stated, “Despite elevated uncertainty, the economy is in a solid position. The unemployment rate remains low. The labor market is at or near maximum employment. Inflation has come down a great deal, but it has been running somewhat above our two percent longer-run objective.”³

In 2025, diversification has been a sound strategy for managing the uncertainty of geopolitics, reported David Rovella of Bloomberg.

“Amid the geopolitical and economic maelstroms of 2025, diversified investors may end up remembering the first six months for something altogether less dangerous or dramatic…the year has still managed to see the strongest stretch of synchronized market gains in years. Rather than spelling a slow-motion disaster for bulls, months of whiplash across equities, fixed income and commodities have rewarded strategic indifference.”⁴

Major U.S. stock indexes finished last week lower.5 Yields onlonger maturities of U.S. Treasuries also moved lower over the week.⁶

Data as of 6/20/25	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 Index	-0.2%	1.5%	9.0%	16.6%	13.9%	10.9%
Dow Jones Global ex-U.S. Index	-1.0	12.1	10.8	9.9	6.5	3.0
10-year Treasury Note (yield only)	4.4	N/A	4.3	3.3	0.7	2.4
Gold (per ounce)	-2.0	29.0	43.2	22.4	13.8	11.0
Bloomberg Commodity Index	1.4	8.1	3.9	-5.5	10.5	0.7

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

WHAT IS THE FEDERAL RESERVE? The Federal Reserve (Fed) is the central bank of the United States. It is made up of twelve district banks that are supervised by a Board of Governors. Basically, the Fed oversees banks, protects consumers, and keeps our financial system stable.⁷

It’s also responsible for keeping the U.S. economy healthy by making sure:

People are working (maximizing employment) and
Price increases are low (stabilizing inflation).⁷

How does the Fed support the economy?

The Federal Reserve’s Open Market Committee (FOMC) meets eight times each year to decide whether – and how – the Fed should influence the economy.⁷

For example, when prices rise rapidly, the FOMC lifts the federal funds rate. As the federal funds rate move higher, banks raise the rates they charge for loans and credit cards, and people begin to spend less. Demand for goods slows, and prices move lower.⁸

When the federal funds rate increases, bond rates perk up, too, which can be challenging for investors who own bonds with lower interest rates. That’s because there is an inverse relationship between bond prices and bond rates. When rates rise the value of bonds with lower rates declines. On the other hand, investors have an opportunity to purchase new bonds that deliver a higher level of income, explained Nick Lioudis on Investopedia.⁹

In contrast, if the economy shows signs of weakness – rising unemployment, slowing economic growth, flagging consumer confidence – the FOMC may lower the federal funds rate to stimulate economic growth. When the federal funds rate drops, so do the rates banks charge on loans and credit cards, making it cheaper for people and companies to borrow. Usually, as spending increases, economic growth accelerates.

A falling federal funds rate also means the rates on newly issued bonds will be lower. Typically, that makes bonds with higher rates more valuable.⁹

The June FOMC meeting

Last week, the FOMC met andleft the federal funds rate unchanged. The decision had little effect on markets because investors didn’t expect the Fed to change rates. What interested investors was the Fed’s outlook for 2025, reported Jeff Cox of CNBC.¹⁰

The Fed’s Summary of Economic Projections showed that FOMC members expect employment to remain relatively steady, inflation to rise, and economic growth to slow. In addition, collectively FOMC members expect two rate cuts by the end of the year.¹¹

WEEKLY FOCUS – THINK ABOUT IT

“Because financially capable consumers ultimately contribute to a stable economic and financial system as well as improve their own financial situations, it’s clear that the Federal Reserve has a significant stake in financial education.”¹²

– Ben Bernanke, Former Federal Reserve Chair

* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss.

* Consult your financial professional before making any investment decision.

Sources:

1 https://www.bloomberg.com/news/newsletters/2025-06-20/stock-bulls-tell-compelling-story-as-europe-trounces-us or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-23-25-Bloomberg-Stock-Bulls-Tell-Compelling-Story%20-%201.pdf

2 https://www.economist.com/finance-and-economics/2025/06/18/investors-ignore-world-changing-news-rightly or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-23-25-Economist-Investors-Ignore-World-Changing-News%20-%202.pdf

3 https://www.federalreserve.gov/newsevents.htm [Video, first minute]

4 https://www.bloomberg.com/news/newsletters/2025-06-20/in-a-global-storm-markets-reward-indifference-evening-briefing-americas or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-23-25-Bloomberg-In-a-Global-Storm%20-%204.pdf

5 https://www.barrons.com/market-data or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-23-25-Barrons-DJIA-S&P%20-%205.pdf

6 https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202505

7 https://www.federalreserve.gov/aboutthefed/fedexplained/who-we-are.htm

8 https://www.clevelandfed.org/center-for-inflation-research/inflation-101/infographic-on-inflation-interest-rates

9 https://www.investopedia.com/ask/answers/why-interest-rates-have-inverse-relationship-bond-prices/

10 https://www.cnbc.com/2025/06/18/fed-rate-decision-june-2025-.html

11 https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20250618.pdf

12 https://www.brainyquote.com/quotes/ben_bernanke_704778?src=t_federal_reserve

Posted on June 23, 2025

Weekly Market Commentary

The Markets

Investors had a lot to think about last week.

A wealth of positive company and economic news lifted markets for much of last week. However, markets stumbled on news that Israel had launched an attack against Iran. Here’s what happened:

U.S. – China negotiations were positive. U.S. stock markets welcomed news that the world’s two largest economies had successfully established a framework for ongoing discussions. Daniel Flatley and Annmarie Hordern of Bloomberg reported:

“The U.S. and China capped two days of high-stakes trade talks with a plan to revive the flow of sensitive goods — a framework now awaiting the blessing of Donald Trump and Xi Jinping…the Chinese had pledged to speed up shipments of rare earth metals critical to U.S. auto and defense firms, while Washington would ease some of its own export controls…”¹

Demand for U.S. Treasuries was solid. The U.S. government issues Treasury bills, notes and bonds to fund government spending.Lately, there have been concerns about whether demand for Treasuries would fall due to buyers’ concerns about tariffs or deficits or both. Low demand could mean higher yields on Treasuries – and higher interest costs for the United States, reported Karishma Vanjani of Barron’s.²

Last week, there was strong demand for Treasuries. “A closely watched auction of 30-year Treasuries saw stronger-than-expected demand on Thursday, easing for now worries that investors would shun the U.S. government’s longest maturity,” reported Michael Mackenzie of Bloomberg.³

Inflation remained relatively low. The U.S. Consumer Price Index (CPI), which measures inflation, showed headline inflation was up 2.4 percent year over year in May. When volatile food and energy prices were excluded, prices rose 2.8 percent year over year. The cost of energy declined in May, and the price of gasoline dropped 12 percent.⁴

“The May CPI came in cooler than expected. While tariff impacts could send inflation higher in the months ahead, the fact that prices held steady so far was an encouraging sign. Odds of a September interest-rate cut ticked higher, and bonds rallied on the news. That has led to rallies in riskier and rate-sensitive stocks,” reported Connor Smith of Barron’s.⁵

Israel launched an attack on Iran. Stock markets moved lower on Friday after Israel launched an airstrike that targeted Iranian nuclear facilities and military leaders, and Iran responded.

“A full-scale war between Iran and Israel has long represented one of many geopolitical planners’ worst-case scenarios. A conflict that damaged global oil supply or shipping would quickly reverberate in the U.S. and across the world by quickly raising oil prices and sending investors selling stocks for safe-haven assets,” according to Matt Peterson of Barron’s.⁶

By the end of the week, major U.S. stock indexes had moved lower.⁷ Yields onlonger maturities of U.S. Treasuries also moved lower over the week.⁸

Data as of 6/10/25	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 Index	-0.4%	1.6%	10.0%	16.8%	14.3%	11.1%
Dow Jones Global ex-U.S. Index	0.2	13.3	12.2	9.5	7.4	3.3
10-year Treasury Note (yield only)	4.4	N/A	4.2	3.4	0.7	2.4
Gold (per ounce)	2.9	31.6	48.7	23.3	15.0	11.3
Bloomberg Commodity Index	1.9	6.6	2.5	-7.5	10.6	0.5

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

DO YOU KNOW WHEN YOU’RE USING ARTIFICIAL INTELLIGENCE? Artificial intelligence (AI) is becoming a part of everyday life for many people in the United States, but we don’t always recognize it when we interact with it.

A recent Gallup poll asked Americans whether they had used any type of AI-enabled product over the last seven days.⁹

36 percent said they had.
50 percent of those surveyed said they had not.
14 percent weren’t sure whether they had or not.

It’s not always clear when we’re using a product that uses AI. Consider the following list. Which of these do you think relies on AI?

Wearable fitness trackers that evaluate sleep and exercise patterns
A chatbot that answers your questions immediately
Product recommendations that are based on previous purchases
Security cameras that send alerts when a stranger is at the door
Email services that remove spam before it gets to your inbox
Music playlist recommendations from a digital music provider

When Pew Research surveyed more than 11,000 Americans, asking about “common ways they might encounter [AI] in daily life”, these were the examples they gave.¹⁰

They found that wealthier individuals (52 percent of upper income participants) and those with more education (53 percent of postgrad and 46 percent of college grad participants) were most likely to recognize that all of these examples rely on AI. In addition, younger Americans were more aware of when they interacted with AI than older Americans were. Overall, less than one-third (30 percent) of those surveyed answered the question correctly.¹⁰

The fact is that most people use AI and interact with it more frequently than they may realize.

“… when asked about their usage of six common AI-enabled products (personal virtual assistants, navigation apps, weather forecasting apps or websites, social media platforms, streaming services, or online shopping apps or websites), 99 [percent] of U.S. adults report using at least one of these in the past week, with 83 [percent] saying they have used at least four,” reported Ellyn Maese of Gallup.⁹

Most Americans interact with AI at least once a week, and probably far more often.

Weekly Focus – Think About It

“AI is the new electricity.”¹¹

– Andrew Ng, AI pioneer